First about hosting your images locally - I can see how this might cause potential conflict with the need to keep your site load time down - I've sure I've even read on Google blogs (sorry no citations at hand) recommendations to drop your larger images on S3 or similar to keep page speed high.

My uncle is an artist of some local repute and we're starting run into this issue as we need larger image sizes to properly do his work justice.

Secondly, I'd like to question the exclusion of TITLE tags in images, not so much as an SEO tactic, but more for users. There are still browsers - you know who you are... - who don't show ALT text on mouse-over, only TITLE, and I think a little bit of pop-up text is still useful from a UX point of view.

Regardless, thanks again for the reminder to keep thinking about images and what and how they contribute to a page's overall performance ;-)